Namibia takes a U-turn with its new crypto regulation bill

• Once the Ministry of Finance determines a date, the law will come into force in the country.
• Called the Namibia Virtual Assets Act 2023, it is the first law in Namibia, outlining how to regulate crypto activities.

Namibia officially added a crypto regulation law into its Gazette on 21 July.

The country’s national assembly passed the bill on 6 July and it was later signed by President Hage Geingob on 14 July. Once the Ministry of Finance determines a date, the law will come into force in the country.

With this decision, the Namibian government took a U-turn from its previous decision taken in 2017 to ban crypto exchanges in the country. Called the Namibia Virtual Assets Act 2023, it is the first law in the African country that outlines how to regulate crypto activities.

The act aims to appoint a regulatory entity to oversee cryptocurrency exchanges in the country.

The government claims that the goal of this law is to control risks of money laundering and the financing of terrorism through crypto assets. It also aims to protect consumer interest in the ever-volatile crypto market.

Non-compliant providers could reportedly face fine of up to $671,000 (10 million Namibian dollars) and 10 years in prison. However, the central bank has reiterated its position that cryptocurrency will not hold legal tender status in Namibia.

Namibia takes a U-turn on crypto within six years

In 2017, the central bank of Namibia published a paper, “Position on Distributed Ledger Technology and Virtual Currencies in Namibia.” It declared in the position paper that under the Exchange Control Act of 1966, crypto exchanges are not permitted and cryptocurrency cannot be accepted as a mode of payment for goods and services.

The central bank said it cannot endorse any activity involving cryptocurrency, notwithstanding its ability to facilitate remittances and other consumer payments due to the lack of legal premise. It had expressed concerns about the usage of cryptocurrency for the purpose of money laundering.

However, the bank revised its original position in 2018.

The recent decision of the Namibian government underlines the fact that a lot of nations across the globe are putting their faith in crypto assets and the underlying blockchain technology.